accelerating execution of aegon americas strategy ... helping people achieve a lifetime of financial...

Helping people achieve a lifetime of financial security

Accelerating execution of strategy

Mark Mullin New York City – December 8, 2016

CEO of the Americas

Member of the Aegon Management Board

2

Key messages

• Capital generation of ~USD 1 billion per annum, with growth after 2018

• Strong delivery on expense savings target; doubling 2018 target to USD 300 million

• Achieve return on capital of 9% by 2018

• 5 part plan in place to accelerate pace and exceed expectations

Reaffirming

2018 targets

• On track to deliver original 2018 expense target of USD 150 million in 2017

• Further net reduction of >500 roles announced

• First phase of location strategy implemented – impacting 3 locations

• Strategic decision to close Affinity, Direct TV and Direct Mail channels

Robust

management

actions

• Well positioned for market opportunities with a clear view of our portfolio

• Integrated worksite strategy leverages market-leading capabilities

• Delivering an innovative, digital front-end for retirement plans and employee benefits

• Investing in talent and skills to deliver a flexible, digital capability for the future

Positioned for

the future

3Delivering on 2018 targets

Source: Swiss Re sigma; Census; US Bureau of Economic Analysis

Strategically positioned to capture opportunities

A significant and growing marketplace

>$500bn Largest insurance

market in the world

325m Affluent and

aging population

~6% Personal

savings rate

Well positioned franchise

Integrated worksite strategy

leverages market leading capabilities

Delivering an innovative, digital front-end for retirement plan and employee benefit customers

• Leading wealth & health businesses

• Offering attractive products across

channels

• Iconic and well respected brand

4Delivering on 2018 targets

Optimizing position by seeking opportunities

Managing an evolving landscape

Lower for longer rates DOL Fiduciary Rules

• Fiduciary rules

• Transparency

• Consumer protection

• Management actions to reduce exposure

• New approach reduces hedging volatility

• Additional action on expense base to strengthen path to

achieving targets

• On track for April 1, 2017 implementation

• New fee-based products launched

• Working with key distributors to strengthen relationships as they transition

• Deepening and expanding retirement plan offerings for participants with Managed

Advice

Customer & Technology

• Demographics drive strong need

• Behaviors changing

• Technology enabling new solutions

• Innovative and integrated offering for the worksite

• Enabled by leading-edge technologies

• Driving operational efficiencies across the organization

• Low interest rates

• Equity volatility

• Challenging tradition

5Delivering on 2018 targets

Accelerating pace and scale of delivery

Committed to our strategic objectives

• Provide omni-channel, mobile-first

experiences to engage

directly with customers

• Create solutions that are convenient,

rewarding and relevant

• Allocate capital to businesses that fit our

strategic direction and

create profitable growth

• Optimize value of back books

• Invest in capabilities and expertise to support our ambitions

• Advocate accountability, agility and customer centricity

• Reduce complexity, drive consistency and decrease costs

• Create a positive and meaningful experience for users, promoting

strong relationships

6Delivering on 2018 targets

Management team committed to deliver

Clear 5 part plan to optimize performance

1

2

3

4

5

David Hopewell Chief Product Officer

Dave Paulsen Chief Distribution Officer

David Macmillan Chief Marketing Officer

Gerard Rescigno Chief Technology Officer

Blake Bostwick Chief Operations Officer

Todd Fuhs Chief Risk Officer

Eoin Elliffe Head of ALM & Hedging

Today’s breakout sessions

In-force management Starting with Life & Health

Location strategy Reduced US geographical

footprint

Efficient organization Focused and disciplined expense

management

Optimizing the portfolio Disposition of non-core assets

New business & revenue Strategic overhaul of product

offerings & channel positioning

7

• Successful execution of expense savings

• Optimizing capital and improving returns – Increasing monthly deduction rates on certain

Universal Life insurance blocks to remain below

maximum rate guarantees

– Requesting Long Term Care rate increases

– Assessing all Life & Health blocks to identify opportunities to improve returns on in-force

• Actively developing new solutions to

engage with existing customers – Using Managed Advice to improve the

experience of Retirement Plan participants and

expand revenue generating opportunities

Delivering on 2018 targets

Starting with Life & Health

1. In-force management

In-force

management

Expense

savings

Capital

optimization

Liability

management

Risk

transfer

Retention

Asset

allocation

8Delivering on 2018 targets

* Enterprise Marketing & Analytics Platform – incorporating internal and external data sources to drive insight on customer value & journeys

Engaging employers and participants to drive value with digital technology

2. New business and revenue - Worksite

• Strong existing presence - > 6 million participants and > 40,000 employers

• Integrated worksite offering combining wealth, health & advice

• Engaging digital interface for employers, participants and advisers

• Mobile-first technology to enable cross-selling as we get closer to

customers

• Enables efficient journey by straight- through processing

Leveraging our position

& new technologies

Employer

Participant

Adviser Retirement

Savings

Life & Health

Advice &

guidance

Funds

Stable Value

Solutions

Best of Breed

external partners

Digital first &

straight-through

processing

Selected

partners

Integrated

Digital

Worksite

PlatformIn-house

9Delivering on 2018 targets

Source: 1) Chatham Partners 2) LIMRA 3) SPARK

Competitive advantages at the worksite

Significant growth opportunities

2%

3%

4%

5%

0

1,500

3,000

4,500

6,000

7,500

2011 2013 2015

Voluntary sales (lhs) Market share (rhs)

(Assets USD million, % of sales)

Employee Benefits2

USD 7 billion market

• Double market growth and fastest- growing amongst top 10

• Broad portfolio of market leading life and health products

Health

(Assets USD billion, % of assets)

Defined Contributions (DC)1

USD 7 trillion market

• Growing 4 times faster than industry

• Strong competitive position in all sized plans post Mercer acquisition

0%

2%

4%

6%

2011 2013 2015

0

2,000

4,000

6,000

8,000

DC (lhs) Market share (rhs)

Wealth

0%

10%

20%

30%

2011 2013 2015

0

2,000

4,000

6,000

8,000

IRA (lhs) Retention rate (rhs)

(Assets USD billion, % of rollovers)

Individual Retirement Accounts3

USD 8 trillion market

• Increased retention rate to 19%

• Extending Advice Center capability for participants

Advice

10

0

50

100

150

200

250

Universal Term Whole

Closely affiliated Brokerage Worksite Other

* Source: LIMRA for nine months 2016

Delivering on 2018 targets

Significant potential to provide Life products to middle America

Opportunities in Life

Market leading positions* Positioned to capture growth

• Reaching fast growing portions of middle market via World Financial Group, the dominant channel for Transamerica’s IUL sales

• Growing life sales at the worksite at more than three times the industry rate*

• New product offerings to enhance competitive position in the brokerage channel

#2 Indexed Universal Life Individual

Term Life

11% market share

#5 5%market share

Individual

Whole Life #9 3%market share

Overall

Individual Life #6 5%market share

Diverse product & distribution mix

(USD million)

Transamer